While there are many kinds of loans out there, there are a few things you can expect when you apply for any type of loan. After all, whether it is a fast cash loan, an online loan or a home equity loan, you are asking to borrow money in every scenario! Knowing the process of applying for a loan is very important and will help you be prepared for what is to come.
Credit Approval Process
No matter what type of loan you are applying for, you are likely going to fill out a credit application. The lender will pull up your credit report and credit score along with other credit factors such as income and your current debt. The lender then compares your information to their standards to determine if you will qualify for the loan. The lender will then approve or deny you based on if you meet their criteria.
Each lender will be looking at different factors when they assess your credit. Loan underwriting standards will vary from one financial institution to the next and from one type of loan to the next. For example, a fast cash loan from a small private lender may be more lenient and grant loans to those with lower credit scores and lower income. A large national bank assessing your credit to secure a business loan may have higher underwriting standards.
While you won’t always know for sure if you will qualify for a loan, most financial institutions will disclose the parameters of their loans. You can also talk to the lender and ask what credit factors they will be looking at and what you need to qualify for a loan. Check your credit score before applying for any loan so you can be prepared.
Applying for A Loan
When you are ready to apply for a loan, the actual application process is simple. Most lenders will let you apply online and grant you an online loans almost immediately. You can frequently find information about required credit score, minimum income and other qualifying factors on a lender’s website as well.
You can apply for a loan in person at your local lender as well. The process will be almost identical to applying for the online loan except you will be filling out paperwork rather than entering your information into a computer. However, you will be able to discuss any questions you have about the loan with an actual person if you go in to apply.
Loan Approval or Declination
Thanks to the internet, most loan applications are approved or declined quite quickly. A fast cash loan can be granted within an hour and a same day loan could be yours in a day. More complicated loans, such as mortgages, may take little longer but it is likely you will know within a few days if you were approved or declined. For the complex loans, don’t be surprised if your lender needs more information from you. Work history and tax returns are examples of something a lender may need to see to help decide if they can grant you a loan.
If you are approved, great! Congratulations! You can move on and spend the loan money as you need. If you are declined, you can expect to get a letter in the mail from the lender explaining why (this is a customary practice with most lenders). However, don’t get discouraged. There are many lenders out there and a wide variety of loans you can apply for. Try talking to another lender with less strict requirements or look into a different kind of loan that will give you the funding you need.
Applying for a loan can be quite simple but it can also get complicated when you are looking into larger dollar amounts. To help you along the application process, know your credit score and be aware of your financial standing. Look into all types of loans and decide which is best for you. Talk to your lender, ask questions and read the lenders website for useful information. Be prepared, do your research and that loan will be yours!
